Inditex sees profits rise by 18% in first quarter
Inditex, the company behind popular fast-fashion brands like Zara and Massimo Dutti, reported first quarter earnings this week. The company, which became the largest ever company to list on the Spanish exchange earlier this year, helped to increase the distance between itself and struggling competitors when it revealed that its first quarter net profit has risen by 18% from the same period a year ago. Sales growth was similarly impressive, showing a 14% increase in the same period.
Over the last 12 months, Inditex’s share price has gone up by 23%
SOURCE: Yahoo Finance
Inditex is the world’s largest fashion retailer by revenue, and its results – impressive as they are – are more or less in line with analysts’ expectations. The company said that, on constant currency terms, sales in-store and online rose by 12% during the first quarter and “through the first five weeks of the second quarter.”
The company also said that its continuing integration of offline and online sales is progressing well. Inditex’s firm footing in the fast fashion world is a reflection of where it makes its garments: because it keeps manufacturing close to its stores, it is able to respond very quickly to changes in taste and demand. Societe Generale analyst Anne Critchlow thinks this is a benefit to the connection between its online and offline operations, saying:
“The systems were always used to handling individual orders coming in from store managers, which in principle is similar to handling orders coming in from individual online customers.”
Dominion holds Inditex in its Global Trends Luxury Fund.
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